The good news — if there is such a thing when it comes to taxes — is that, unlike last year, when surprises and changes came fast and furiously as Congress resolved its fiscal cliff issues at the last minute, changes for the 2013 tax year are minimal, according to CPA Susan Clifford, tax expert and principal at longtime local accounting firm Hancock Askew & Co.
However, if you’re one of the fortunate ones who made more than $400,000 — or $450,000 if you’re married filing jointly — last year, the IRS has some new ways to help you part with that money.
For example, your tax rate will go from 35 percent to 39.6 percent, capital gains tax will go from 15 percent to 20 percent and you’ll see a 3.8 percent surcharge from the Affordable Care Act.
No worries? Not so fast. Even those of us who fall well below that lofty tax bracket have a few new things to contend with.
To help our readers sort through those friendly 1040s and the myriad schedules that often accompany them, the Savannah Morning News and savannahnow have again this year teamed with Clifford and her colleagues at Hancock Askew.
Five of the firm’s tax accountants will be available at lunchtime Wednesday to take your calls and help you sort through questions regarding your individual or small business return.
What they can’t do, of course, is offer legally binding answers to questions specific to your circumstances.
“Because we can’t possibly understand anyone’s complete tax situation in one phone call, we’ll give you our best advice based on what we know about your circumstances and suggestions for seeking additional help if you need it,” Clifford said.
To get you started, here is an update of 2013 income tax regulations:
• The 2013 personal exemption is $3,900 but begins to phase out when adjusted gross income exceeds $250,000 ($300,000 for married couples filing jointly). It phases out completely at $372,500 ($422,500 for MFJ.).
• Itemized deductions are limited for individuals with incomes of $250,000 or more ($300,000 for MFJ.) The limitation is the lesser of 3 percent of adjusted gross income above the applicable amount or 80 percent of the itemized deductions otherwise allowable for the taxable year. Itemized medical expense deductions, investment interest deduction, casualty, theft, or gambling loss deductions are exempt from the limitation.
• The deduction for medical expenses is now limited to the amount over 10 percent of adjusted gross income – it was 7.5 percent. If the taxpayer is 65 or older, the change doesn’t go into effect until 2017.
• Allowable contributions to IRAs and Roth IRAs increased to $5,500 with a $1,000 catch-up for those born in 1963 or earlier.
• Roth IRA contributions phase out between $112,000 and $127,000 for singles and $178,000 and $188,000 for couples.
• Standard mileage rate for 2013 is $.565 with $.24 for medical travel and moving and $.14 for charitable miles. Rate changes to $.56 in 2014.
• Income tax exclusion for up to $2 million in forgiven home mortgage debt remains for 2013 as does the $250 for supplies purchased by classroom teachers and the college tuition deduction or credit.
• The wage ceiling on which Social Security is taxed has been increased to $113,700. Medicare tax is unlimited, but if you earn more than $200,000, an additional 0.9 percent will be withheld.
• The $1,000 Child Tax Credit, the enhanced Earned Income Tax Credit and the enhanced American Opportunity Tax Credit are all extended through 2017.
HOW TO PARTICIPATE
WHAT: Five accountants from Hancock Askew & Co. will be available to help answer your tax questions.
WHEN: 11:30 a.m. to 1:30 p.m. Wednesday, March 19.
CALL: 912-629-7752. Calls will be answered in the order received. Selected questions and answers will be published in the Savannah Morning News on Sunday, March 23.
CAN’T CALL IN WEDNESDAY? Email your questions to sclifford@hancockaskew.com by 10 a.m. Wednesday. The advisors will answer as many of the emailed questions as space allows in Sunday’s paper.
MEET THE EXPERTS
The Hancock Askew experts who will be available Wednesday to answer your tax questions include:
J. William Griffin, CPA: A native Savannahian and 1985 graduate of Georgia Southern University, Billy brings over 27 years of accounting experience. With specializations in heavy construction, manufacturing and retail and service industries as well as multi-state income tax issues, his primary area of services to clients is in the area of income tax planning and preparation.
Carolyn S. McIntosh, CPA: Also a partner in the firm, Carolyn has been serving clients for 15 years in the areas of tax, financial planning and management services. She serves individuals, fiduciaries, partnerships, corporations and not for profits. Carolyn specializes in business and tax consulting, individual tax planning, family owned businesses, real estate, fiduciary, estate and gift tax s.
Susan Corderman Clifford, CPA: A principal in the firm, Susan has both public and private accounting experience. She has been serving clients for more than 30 years in the areas of tax, financial planning and fiduciary services. Susan serves individuals, partnership, fiduciaries, corporations, and not for profits.
Stephen Leonard, CPA: A manager in the tax department, Stephen manages a diverse array of tax clients, including high-wealth individuals, trusts and estates, partnerships and corporations. His areas of specialization also include small to mid-sized businesses, services for the legal profession and political campaign treasury management.
Brian J. Prevatt, CPA: A manager in the tax department, Brian joined Hancock Askew five years ago upon graduation from Georgia Southern University. He has experience preparing individual, partnership and corporate tax returns. He also has experience in performing 401(k) audits, financial statement reviews and compilations. His areas of specialization include tax compliance, research, consulting, and counsel for cop rations, partnerships, and self-employed and high net worth individuals.